Competitive Intelligence / Competitive Strategy, by Arik Johnson
by Arik Johnson

Race for the Whitehouse: Competitive Strategy in the Battle for National Leadership

What do politicians and diapers have in common? They both need frequent changing and for the same reasons. Cheesy jokes aside, I thought it'd be fun in this week's column to look at the similarities and differences between the race for the Presidency and the world of business, from a tactical competitiveness standpoint.

Now that the Democratic and Republican conventions are over and the two major parties' candidates have accepted their nominations, we find ourselves, at least here in the U.S. if not around the world, compelled to observe the horserace to become the next "Leader of the Free World". It strikes me that, like rivalries in business, political competition is mostly concerned with "products", "marketing", "customers" and "differentiation".

In fact, business and politics have learned a lot from one another over the past several years, especially on the U.S. national scene between Republicans and Democrats. Today, the similarities have never been more apparent, and in true fashion as Clinton-era "triangulation" of a candidate's message to voters is based on a very deliberate benchmarking of best practices and significant market research… allows parties to discover what sells based on what marketing messages customers respond to over time. Perception of value is more important than real value; and competitive uniqueness and novelty is still what sells. Look at the Governor of Minnesota - former wrestler Jesse Ventura.

In business, companies compete for marketshare relative to their competitors' direct or substitute products in their attempt to satisfy demand of the customers they market to while making a profit, usually based on differentiation of those products through various features such as price, quality and availability of alternatives, as well as how well they are marketed and sold. Likewise, in politics, the political parties (companies) compete for votes (marketshare) relative to their opposing parties (competitors) candidates (products) to satisfy the constitutional requirement (demand) of their customers (voters, and, significantly, the campaign financiers desire to have access to those office holders, if and when they're elected) whom they are marketing to while trying to get elected (turn a profit). This is also based on differentiation of candidates through their various policy opinions (differentiation of features), which candidate displays the best character and leadership along with the subtle effect of the impression in voters' minds about who is the lesser evil (value based on quality/price scale), based on how well they are marketed and sold.

The only major difference is that success (election to office) or failure (defeat) in politics is absolute: unlike the business arena where numerous also-rans can survive on microscopic shares of markets that might be dominated by hegemonic industry leaders. We might say there's just a much more specific date of obsolescence for this particular market in the decline phase of the product life cycle - November 7th, when we decide who wins.

There is another minor difference between the two realms -- the ambiguity about who the actual customers are that would be served by these products - voters or contributors. The past five years have shined a great deal of public scrutiny on the subject of campaign finance reform and whether or not big-money candidates are corrupt in their attempts to buy their way into the Whitehouse - in fact, I wrote an essay a few months ago during the Primary season on the subject of how much the Whitehouse "costs" and how elastic that price might be.

Witness the success of John McCain in his run for the Republican nomination almost exclusively on the basis of campaign finance reform; likewise, Bill Bradley focused on this issue with his very vulnerable opponent. Everyone is likely aware of Al Gore's imbroglio with fund-raising schemes and the sale of the Lincoln Bedroom to the highest bidder, as well as, the vast war chest amassed by George W. Bush's as the Primaries got underway which helped him to vanquish opponent after opponent in gaining the Republican candidacy. Incidentally, I consider Presidential Primaries the business equivalent of pitting engineering teams against one another to come up with a better product for the company to bring to market. It seems to me that the financiers of electoral races are really more like "shareholders" in the firm (party) than customers of the product (the winning candidate), should my analogy survive.

Whether campaign contributors or the voters are the customers or shareholders, I think most Americans believe they are both, or at least they should be. In fact, many are… if you contribute funds to your favorite candidate's campaign, then you're a part of the campaign finance the party uses to try and get that candidate elected, sort of a political venture capitalist investing in the IPO. Of course, that's not the problem with campaign finance - the practices we're trying to curb are not those of the individual American voter, but rather the large, soft-money-spewing entities (transnational corporations, political lobbies, etc.) that threaten our democratic process.

The real question is, is ours really a "democratic" process in the first place? Aren't Presidents elected by "electoral delegates" brought in from the states, rather than the voters directly? Absolutely… and, regardless of the post-convention bounce enjoyed by Al Gore for now, George W. Bush is closer to the 270 electoral votes needed to become the next President.

The subject of polling as metrics of performance, simply to see who's in the lead as we race towards November 7th is, itself, controversial. Polling is the business world's equivalent of a financial statement press release - only carried out by highly contextualized conversations with people over the phone to see whom they plan to vote for. Yet, polls help decide elections.

Consider John McCain… with very little argument from most observers, general opinion of almost any American will tell you John McCain was a better candidate than George W. Bush when pitted against Al Gore, although not reflected in the polls. Yet, in the face of the perception of Bush as the Republican front-runner, combined with his massive, publicly known-about financial reserves (largely decimated in the Primaries fighting his own party in the R&D experiment), McCain dropped out of the race. Today, it's questionable whether Bush can win, despite his "sure-thing" appeal a few months ago, based on the money he's had to spend to build his brand and beat competitors during the R&D phase of the Primaries. This is an example of a firm (the Republican Party) that has spent its venture capital (campaign finance) on product development (picking a candidate) before they even got to market (the election). Pollsters make poor oracles in predicting election outcomes, as they would also make poor accountants in terms of producing metrics for measuring business performance. In fact, the market research they conduct, once reported, changes the very market landscape they're trying to survey. The smart thing to do would be to ignore them and plow ahead.

As in business, it's always dangerous to ignore smaller, nimbler players in a marketplace. So let's consider the other two candidates that are in any way serious or interesting in this competition… hold on, now it's three candidates and two parties - Ralph Nader, Pat Buchanan and John Hagelin.

The Reform Party (although De-formed might be more appropriate), with its recent fistfights, Jesse The Body's abandonment and other sideshow antics, seems like a long shot. Even though, its (first) candidate, Pat Buchanan, presents one of the most articulate and compelling arguments about free-trade policy I've ever heard, John Hagelin and his backers (the Perot faction) seem to have moved in with a different message.

Hey guys… this is what Primaries are for - take a tip from the other parties will ya'? Sheesh! But, then, internecine warfare is nothing new to third parties in the absence of their charismatic founders; just as it is not unfamiliar in product development. As R&D continues, it's unlikely that anything short of the Federal Election Commission (not as a management consultant, but as a cop) will be able to untangle the product development process at this firm. The actual product features, whichever one they actually try and bring to market, are late to market, completely unbranded and will almost certainly capture very little in the way of marketshare.

Then there's the Green Party and Ralph Nader, the only true "Left" candidate left in the race, it might seem. As Gore copies best practices from his predecessor in crafting his message of a prosperous new economy, he sounds more like a Republican to me. Nader is interesting in that, most liberals feel that a "vote for Nader is a vote for Bush" and will drag support away from Democrat Al Gore. The Green Party are kind of like the product developers that, growing unsatisfied with company support of their idea, jump ship and launch their own start-up.

In fact, the Democrats are right - they've learned the lessons of the '92 election that let the Reform party spoil a Republican victory by siphoning away conservative voters and led to eight years of Democratic administration through a plurality (not a majority) of voter support behind President Clinton. Even that wasn't Perot's greatest influence on Democratic strategy - his real contribution to American politics is the Democrats co-opting of a balanced federal budget objective Perot had promised, among a few others. While Nader stands little chance of being elected, he could turn spoiler on the Gore campaign, should the real left wing of the Democratic Party decide Gore is a little too corporate for their taste, although Dems are praying it won't go that direction. Nader could also achieve his real goals - not to become President but to effect change in policy - if he appeals correctly to the right customers.

Regardless of the outcome and the actual victor in this race to win the Office of the President, we can always look back fondly on that supremely skilled, if morally bankrupt, innovator in the American political marketplace, Bill Clinton. He changed the nature of how candidates are sold to this new economy of national politics. His charisma, competitiveness and significant good luck at being in office during the single greatest expansion of productivity enhancing technologies the world has ever known (which by the way is the real reason "it's the economy, stupid"), shows us the power of being in the right place at the right time - and knowing how to seize a well-timed market opportunity.

Arik R. Johnson is Managing Director of the Competitive Intelligence (CI) outsourcing & support bureau Aurora WDC. Learn more about Arik at his firm's Web site